BlackRock on Wednesday reported $3.151 trillion in client assets as of June 30, down 6.3% from the prior quarter due to broad equity market declines and continued outflows from quantitative equity and cash management products.
The latest AUM total was up 129% from BlackRock’s legacy client assets as of June 30, 2009, ahead of the firm’s December 2009 acquisition of BGI and its $1.8 trillion in client assets.
During the second quarter, $33.9 billion of “concentration-related and active quantitative product outflows” and $24.9 billion in money market outflows more than offset $28.4 billion in net inflows for long-term products and advisory mandates.
On balance, the firm’s earnings announcement showed net long-term outflows of $5.9 billion, and — with money market strategies included — overall net outflows of $30.4 billion.
Market-related declines for the latest quarter, meanwhile, came to $156.5 billion, with foreign exchange-related losses shaving another $22.5 billion from BlackRock’s AUM totals.
BlackRock reported net income of $432 million for the latest quarter, up 2.1% from the prior quarter and 98% above BlackRock’s pre-merger net income for the year-earlier quarter.
Revenues, meanwhile, came to $2.032 billion, up 1.9% from the prior quarter’s $1.995 billion, and up 97% from the year before.
In a conference call, Laurence D. Fink, BlackRock’s chairman and CEO, said the latest quarter was a “complex story” for BlackRock, with both large, “lumpy” outflows and similarly large inflows.
He noted that outflows related to BlackRock’s acquisition of BGI, where the combination of two trillion-dollar asset managers left some clients with more exposure to a single firm than they wanted, continued in the second quarter, as did outflows related to performance struggles by active U.S. and Australian quantitative equity strategies.
According to the firm’s news release, net outflows from BlackRock’s total active quantitative equity strategies jumped to $26.3 billion during the second quarter, from $8.8 billion for the prior quarter.
In the news release, Mr. Fink predicted that outflows due to concentration issues and weak quantitative performance could continue during the current quarter.
Net money market outflows for the second quarter totaled $24.9 billion. During the conference call, Mr. Fink said falling interest rates should narrow the competitive edge bank deposits have enjoyed this year.
While conceding the second quarter was “difficult,” Mr. Fink said BlackRock is “continuing to build momentum for the future,” with the firm’s greatest difficulties largely behind it and “a lot of opportunity ahead of us.”
He noted that BlackRock’s pipeline of mandates funded or to be funded now totals $59.5 billion, including $47 billion in long-dated strategies. As a sign of the strength of the firm’s building momentum, Mr. Fink said that $59.5 billion includes $15 billion in outflows anticipated for the current quarter from one client, after BlackRock’s purchase of BGI left the combined firm overseeing more than 40% of the client’s assets.
Separately, Northern Trust reported $603 billion in assets under management for the quarter ended June 30, down 7% from the previous quarter but up 8% from the second quarter of 2009.
Northern Trust reported a profit of $199.6 million in the second quarter, up 27% from the three months earlier but down 36% from a year earlier. Revenue of $974 million was up 7% from the first quarter but down 7% in the second quarter of 2010.
Northern Trust Chairman and CEO Frederick Waddell said in a statement the profit earned in quarter came “despite the low interest rate environment and prolonged economic recovery.”
